How to cut your own throat

15 December 2008, 12:00am

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Via Megan McArdle, I see that the Detroit News and the Detroit Free Press are taking a novel approach to the malaise that's crippling newspapers across America (and Britain): make it much more difficult for people to buy your product. At first you may think that this is so counter-intuitive that it must be brilliant. But it's not: it's every bit as stupid (I think!) as it sounds.

The Motor City papers are apparently only going to deliver papers to their readers' homes three days out of every seven. The theory, as I understand it, is that all this printing and delivering is too expensive to be justified on lighter advertising days such as Monday and Tuesday. In future, then, Detroiters will have to find a news-stand to buy the paper or, of course, read it online.

Now, sure, advertising revenue is falling off a cliff at the moment and there's no prospect of a recovery in the short-to-medium term. And I'm equally sure that some bright management types at Gannett (the papers' parent company) have done some sums and found a way of presenting this as a bold and exciting step that will revitalise the businesses. But I'll bet you the case is hooey nonetheless.

Readers are creatures of habit. And habits, once lost, are very hard to regain. That's to say that in many ways the key to holding on to circulation, let alone building it, does not lie in attracting new readers, but in persuading people who currently buy your paper two or three or four days a week to take it more frequently. (There's also, of course, the thing of trying to woo back former readers - but that's an even more difficult task.)

The Detroit papers, by contrast, are assuming that people who suddenly don't receive the paper Monday through Wednesday will continue to purchase it on advertising-heavy Thursdays, Fridays and Sundays. It seems much more likely to me, however, that readers will become accustomed to not receiving the paper early in the week and that this will, eventually, persuade them that they're not missing too much if they cease getting it delivered on Thursday, Friday and Sunday as well.

After all, if you can live without the paper some days, perhaps you can live without it on other days too? Maybe you don't actually miss it at all? Perhaps you're even secretly relieved you no longer have to feel as though you must wade through the paper each day? It could be that just getting the paper on Sundays is enough. The rest of the time you'll manage fine without the hard-copy, profitable paper edition. You didn't realise, did you, that buying the paper was such an easy habit to break? Well, it turns out it is.

And since print advertising remains vastly more profitable than online advertising, the costs of printing and delivering the paper on lighter advertising days act, essentially, as loss-leaders for the fat, ad-heavy, profitable days. But once you tell the public that, though they're used to being able to get beans every day, they'll now only get beans three days a week, don't be surprised if the demand for beans decreases. The punters will find something else and it won't necessarily be the alternative you hope they'd plump for. And of course, if the readers lose the habit and Thursday and Friday and Sunday circulation falls then so too, in the end, does your advertising revenue. Make that, your profitable advertising.

Sure, you might gain online readers but the modest revenue gains you make on the online swings are likely to be outweighed by the losses you incur on the print-edition roundabouts.

All this will be invalidated once someone figures out how to make online advertising pay, but that day hasn't arrived yet and nor, frankly, does it seem imminent. The industry may be in a parlous state and something may need to be done but that doesn't mean that anything is the something that must be done. In other words, this Detroit ploy seems* a move that's too clever by half and, consequently, is deeply stupid.

*Of course, I'm not privy to the actual numbers involved, but making your product worse or making it harder or less attractive to buy does not strike me as a particularly canny business plan. As always, however, I could be talking -or writing - through my hat.